Mumbai: The BSE benchmark Sensex tumbled 637 points and the broader Nifty slipped below the 10,300-mark in late afternoon trade on Friday following heavy selling in blue chip Reliance Industries as well as financial stocks.

The 30-share Sensex, opened on Friday distinctly weak at 34,563.29 and continued to slide to touch a low of 34,140.32 points (intra-day). The index was trading down 636.83 points, or 1.82 percent at 34,142.75 at 1400 hrs.

Traders said Reliance Industries' pre-tax earnings from the business declined for the second quarter in a row and this triggered the heavy selling in the counter.

The operator of world's largest oil refining complex however saw pre-tax earnings from the business decline for the second quarter in a row. It fell 19.6 percent to Rs 5,322 crore as margins dipped. In the first quarter the pre-tax earnings had fallen 16.8 percent.

It earned $9.5 on turning every barrel of crude oil into fuel as compared to a gross refining margin of $12 per barrel. The GRM was also lower than $10.5 per barrel earning in first quarter.

Sentiments took a hit largely on sell-off in NBFCs, led by Indiabulls Housing and Dewan Housing Finance, which dropped over 15 percent on prevailing liquidity concerns, dragging down the key indices down.

Meanwhile, the Reserve Bank on Friday announced more steps to increase liquidity flows to the non-banking financial companies.

The RBI permitted banks to use government securities equal to their incremental outstanding credit to NBFCs, over and above their outstanding credit to them as on October 19, to be used to meet liquidity coverage ratio requirements.

The move will help provide liquidity to housing finance companies (HFCs) and non-banking finance companies (NBFCs) which have come under pressure following series of default by IL&FS group companies.